No matter how different businesses are, they all have one thing in common: they all rely on their customers.
You might just be starting out, or you could be fully established and working for many years now. You might run your own company by yourself, or you may work with a bunch of people. Your business might be small, or it could be a worldwide recognized brand.
No matter what type of company you have, your customers will ultimately determine your success.
With that said, here’s an important question for you. How well do you know your customers?
That might seem like a simple question, but for a surprising number of people, the answer might fall short of where they need to be.
Knowing your customers means knowing who is buying your product. It means knowing what to say to get them to pay attention to what you sell. It means knowing where your sales are coming from.
Without a thorough knowledge of your customers, your business might as well be operating blind.
If you looked at that question and answered, “Not very well,” then you don’t need to panic. You simply know where you need to improve.
After all, that’s why you’re here, right?
So it’s time to think about the best way to get to know your customers. You’ll be able to do that through target market analysis and customer demographics. Hopefully, we’ll be able to answer a few more questions you might have.
So what is a target market?
Put simply, your target market is the customers you’re trying to sell your products to. As part of your marketing strategy, it represents your audience.
You know how television shows and movies often have a target audience? An audience that is most likely to respond favorably to what is presented to them? It’s sort of like that.
Why do you need to know your target market?
You have a great product that you think can change people’s lives. So why not just try to sell that product to as many people as possible?
While that may sound wonderful and seems like a great way to earn more money, having such a broad approach could stretch your resources too thin. And if you have limited time and money to begin with, the effectiveness tends to take a nosedive.
Let’s look at this with a fishing analogy. A fisherman wants to catch fish, so he goes out to the ocean to do so. He doesn’t care what type of fish, he just wants to catch as many as possible. So he casts his hook out and waits. What do you think he will catch? How much of what he does catch will be useful?
Having no idea what he wants to catch is a recipe for disaster. It gives him no way to plan for what equipment to bring, what bait to use, where to go, etc. He goes out to fish with a hope, a prayer, and little else.
Do you see why knowing your target market can be so helpful? Yes, your product is amazing, but it’s probably not for everyone. Only a specific audience will respond to it.
That’s why you need to identify your target market.
How do you identify a target market?
You can identify your target market through what is called a target market analysis. Sometimes it’s referred to as a target audience analysis.
This type of analysis is essentially a study where you figure out the details of your potential target customers.
A target market analysis looks at several areas which can be broken down into 5 W’s and H. Let’s take a brief look at them now.
Figuring out the who of your target audience involves finding out demographic information about them. That can include statistics like age, race, gender, occupation, and more.
This category tells you where your customers live and work. It can include detailed information beyond their address, like the surrounding population size and the climate of the area.
Based on your analysis, you should be able to tell when people are buying products from you. Do you have a peak selling season? Perhaps around the holidays when marketing matters most? When are the usual lulls? How often do repeat customers come back?
A target market analysis also includes discovering when customers see one of your ads or engage with you on social media. It can be broken down by month, day, hour, or even minute. The amount of detail is really up to you.
This involves identifying other aspects of a customer’s personality, such as their interests. Do they have hobbies that inspire them? What do they need in their lives right now?
Equally important is determining why they want to buy your product in the first place. What drives them to make that decision? Why do they want to buy from you and not somebody else?
Lastly, you need to look into customer behavior. In other words, it’s how they act. Do they have certain lifestyle habits that you should know about? What about their purchasing trends?
A target market analysis should answer these questions. With that information in hand, you’ll be able to perform more effective customer demographic marketing.
How do you perform a target market analysis?
Okay, so you agree that figuring out your target market is an important step toward your success. That much is clear.
Now how do you do it?
You won’t always find a clear step-by-step formula to follow for how to do a market analysis, which can make it a challenge. But we can provide some tips for you to consider that should put you on the right track.
Study your current customers
Unless you’re only just starting out, you should already have some customers that are purchasing from you.
They’re a great place to start.
Reach out to them. Find out more about them.
How you go about doing this is really up to you. You might try to interview them personally, though this can take up a lot of time.
An easier path is to send them survey opportunities after they’ve bought a product from you. From there, you can get information to fill out your consumer demographics along with other valuable details that will inform your marketing going forward.
Look at what you’re selling
While you’re busy studying your customers, don’t forget to take a closer look at your own product. What does your product offer that benefits a customer? Don’t just think about it; write down your product’s features.
If you have a book you want to promote about developing a healthy lifestyle, list the benefits people can get from reading it. Once you have identified what those are, then write down the type of people who would benefit the most from your material.
If you sell more than one product, you’ll want to do this with each one. You might have different audiences in mind depending on the item.
While this may all seem basic, you’d be surprised at the sudden thoughts and ideas you can get from this process. It’s like the lightbulb moment in cartoons. Suddenly, you have a better idea for who you can sell your product to.
Collect demographic data
This is where you gather data about your potential customer demographics. Now it might sound similar to the part of studying your current customers, but this deals with future buyers. Your current customers can inform your efforts, though.
For example, let’s say you notice that a significant portion of your current customers seem to come from the San Francisco bay area. You’re not sure why exactly, but the data shows that to be the case. Here’s where you can collect demographic information from that area to get a better view of the type of people who want your product.
This goes for any number of demographic areas. Do you have a lot of customers who happen to be moms in their early 30’s? Search out more information about that particular demographic.
That may seem like a tall task, but you have a number of helpful tools and resources that you can use.
The U.S. Census Bureau has all sorts of information about the population of the United States. Just take a look at this fact page and see how much data it provides. Now think about how you can use it to pinpoint your target audience.
Other tools include commerce websites at your state or local level. Trade journals can also provide useful info, such as emerging consumer trends.
Consider all sorts of demographic factors that go into your marketing. We’re talking about age, occupation, education level, ethnicity, income level, family status, and so much more.
Research your competitors
You shouldn’t limit your focus to yourself. Take some time to look at what your competitors are doing.
Who do your competitors seem to be targeting? If it seems strange, there might be a very good reason for it — a reason that you haven’t considered yet.
Or it might indicate customers you should avoid. After all, if the market is saturated, you want to find potential customers that are overlooked. If you have competitors that are ignoring a demographic segment, that just means you can carve out your own lucrative niche.
Similar to demographics, psychographics give you even more details about customers. This is information that’s harder to quantify, such as lifestyles, values, personality types, and more.
Does your product benefit people with a certain type of lifestyle more? You’ll want to start focusing on people like that.
Psychographics can cover a lot of ground. They can segment people based on the media they consume, their hobbies, or even the food they eat.
Gathering this information requires customers to be open and honest with you. It’s usually done through surveys, questionnaires, and focus groups.
Review your analysis
Once you’ve completed your target market analysis, you should definitely review it. Remember, this is what you’ll be basing your future marketing strategies on, so getting this right is crucial.
Based on your analysis, determine if your target market is the right size. If it’s too narrow, you may need to widen your scope a bit.
Make sure the people in your target audience can actually afford your product. If it’s outside their price range, you’re not going to see too many sales.
From there, you can start crafting the right message that will resonate with them.
Knowing who your target market is can really help you create a pitch that sees results.
What are some target market examples?
Target markets can be as specific or as broad as you want. Generally speaking, the more detailed and specific, the more effective your message will be.
Once you’ve completed your target market analysis, examples will be easy to come by.
For instance, if you’re selling a nutritional supplement, you can describe your target market broadly, such as men in their 30’s and 40’s.
Or you can be more detailed with the description, like married men in their 30’s and 40’s who exercise at least twice a week, love the outdoors, live on the east coast, want to feel healthier, and earn a salary of at least $50,000 a year.
Do you see how your message can change depending on how specific your target market is?
Knowing your customers means knowing success
If you’ve ever interacted with a business that didn’t understand you, then you know how frustrating it can be.
Get to know your customers. Put in the work to understand them. Figure out what makes them tick.
It’s one of the best ways to develop an effective marketing strategy that will speak to them. You’ll have the right bait for reeling them in. And when you do that, success is just around the corner.